Pick n Pay has disclosed significant challenges within its franchise supermarket division, reporting a 0.8 percent decline in sales for the 21 weeks ending July 21, which it describes as “disappointing.”
This performance is set against a backdrop of internal selling price inflation at 4.7 percent, resulting in a 5.5 percent drop in sales volumes at its franchise supermarkets compared to the previous year for the March to July period.
In contrast, the company’s owned supermarkets and hypermarkets saw a 3.6 percent increase in sales, excluding standalone clothing stores. The company attributes this growth to “improved retail disciplines,” which have driven a recovery from a -0.5 percent decline in the latter half of the previous financial year to a 3.6 percent increase in the first half of FY25.
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The resurgence of Pick n Pay Hypermarkets to positive sales growth after a prolonged period of underperformance is particularly notable.
Regarding Boxer, the group has enhanced its reporting transparency in recent years, with Boxer’s revenue and sales growth reported separately since the 2023 financial year under former CEO Pieter Boone. With plans to list Boxer separately later this year, its margins and profitability will be publicly disclosed.
The separate reporting of franchise performance aligns with CEO Sean Summers’ efforts to demonstrate progress in revitalizing the supermarket business. Each segment—company-owned and franchise—faces its own challenges and paths.
The group notes that company-owned supermarkets have generally outperformed franchise stores in recent years. While this trend reversal indicates positive early results for company-owned stores, improving franchise store performance remains a top priority.
The franchise division comprises approximately 250 supermarkets in South Africa, compared to around 300 company-owned supermarkets.
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